Statement by the IMF Mission on the Staff-Monitored Program Discussions with Mauritania

The following statement was issued yesterday by the International Monetary Fund's (IMF) staff mission on the discussions of the Staff-Monitored Program with Mauritania:

"A staff team visited Nouakchott during January 17-28 to continue the discussions on a staff-monitored program (SMP) that will cover the first half of 2006. A preliminary understanding on this program has been reached.

"Since August 2005, the transition government has embarked on the road to transparency, return to economic stability and reforms. The authorities decided to resolve the data issues that had plagued Mauritania's relations with the Fund since the beginning of 2004, and undertook the necessary revisions of economic and financial statistics over a period of more than 10 years. The return to public finance discipline and a prudent monetary policy produced encouraging results but additional efforts are still required. There is also a need to enhance the institutional framework of public finance management and to prepare Mauritania for an efficient management of new oil resources.

"The government program over the first semester of 2006 will lay the basis for a sound economic growth and the consolidation of the external position and price stability, through sound fiscal and monetary policies. The program also provides the framework for the continuation of reforms over the program period and throughout the year 2006, with the aim of accelerating the achievement of development objectives and the fight against poverty. The main areas of reform of the program will be the improvement of public finance management; the establishment of a transparent and efficient mechanism for the collection and management of oil revenue; and the finalization of data verification and revision.

"On December 21, 2005, the Executive Board of the International Monetary Fund (IMF) decided that Mauritania could qualify for relief under the Multilateral Debt Relief Initiative (MDRI) after certain remedial actions are taken. In addition to sound macroeconomic policies over a period of six months, these would include actions in the areas of budget formulation, execution, and reporting, and the resolution of data issues with the Fund.

"The government program will form the framework within which the IMF staff will continue to work closely with the authorities to help Mauritania implement these measures in the coming months. A review of the progress achieved over the first three months will be conducted with the IMF staff at end-April/beginning-May."